Buzz Stocks: Wal-Mart, Procter & Gamble, DreamWorks

Today's stocks to watch in the news include WMT, PG, and DWA

by Andrea Kramer

Published on Nov 13, 2014 at 9:16 AM
Updated on Jul 1, 2020 at 5:18 PM

U.S. stocks are poised to resume their quest for record highs this morning. Making headlines are blue chips Wal-Mart Stores, Inc. (NYSE:WMT) and Procter & Gamble Co (NYSE:PG), as well as entertainment issue DreamWorks Animation SKG, Inc. (NASDAQ:DWA).

  • WMT is set to lead the Dow into the black, with the retailer pointed 2.5% higher ahead of the bell. The equity will likely take out its current all-time high of $81.37, tagged in December, thanks to an encouraging fiscal third-quarter earnings report. WMT closed Wednesday at $79.20 -- just north of its year-to-date breakeven level -- and has already added 3.8% so far in November. Today's post-earnings rally could gain some additional steam as the bears hit the bricks; short interest represents a week's worth of pent-up buying demand, at Wal-Mart Stores, Inc.'s average pace of trading. Plus, nine out of 19 analysts maintain "hold" or "strong sell" opinions, leaving the door wide open for upgrades to lure even more buyers to the table.

  • Fellow Dow component PG said it will sell its Duracell battery business to Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK.A) for roughly $4.7 billion in PG stock. Late last month, the Cincinnati-based conglomerate said it wanted to spin off the battery unit into a separate company. On the charts, PG has added 9.9% in 2014, and touched an all-time best of $89.88 yesterday, before settling at $89.48. Ahead of the bell, the shares are pointed 1% lower; however, the equity's 14-day Relative Strength Index (RSI) sits at 74 -- in overbought territory, suggesting a short-term breather may have been in the cards. In the options pits, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open Procter & Gamble Co puts over calls at a faster-than-usual clip during the past 10 weeks, as the security's 50-day put/call volume ratio of 1.37 stands just 3 percentage points from an annual acme. An unwinding of this bearish sentiment could help PG continue its steady churn up the charts.

  • In other M&A news, toymaker Hasbro, Inc. (NASDAQ:HAS) is reportedly mulling a bid for DWA. The rumors have propelled DreamWorks Animation SKG, Inc. shares 19.5% higher in pre-market action, after closing at $22.37 on Wednesday. It's been a bumpy road for DWA in 2014, with the stock shedding nearly 37%. As such, it's no surprise to find most analysts in the bears' camp, with not one of the nine brokerage firms following the equity doling out a "buy" rating. Likewise, short interest accounts for 13.6% of the stock's total available float, and would take nearly seven sessions to repurchase, at the studio stock's average daily trading volume.

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